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Ontario’s third-largest grocery chain will accelerate its study of automation as it looks to cut the expected $50 million dollars costs of the provincial government’s plan to raise the minimum wage to $15 an hour. This cost does not include the expected salary costs of increasing the salaries of other positions to compensate them for their experience and time spent at the firm.

The CEO explained that the industry is under heavy pressure and given very little time to adjust given both competition in the market and the rapid speed of wage increases.

Stark Labour Costs

The higher labor costs would account for about eight percent of the $586 million in net earnings last year and more than a third of the $127 million paid out in dividends. These losses would either mean a lower level of money to invest into new jobs or more likely far higher prices on goods to make up lost profits.

Metro is not the only firm expected to actively work to offset costs, nor is it the firm facing the largest.

Corporate Response

Firms like Loblaw and Walmart will be expected to pay hundreds of millions if not billions in new wages. Although this could mean billions more in local economies and could allow for more business to grow it is likely that large firms will reduce their workforce first.

An economic analysis commissioned by the Keep Ontario Working Coalition found that 185,000 jobs could be at risk as Ontario businesses stand to take a $23-billion hit within two years of the implementation of Bill 148.

 

 

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